Many companies are grappling with how best to comply with the Commerce Department’s foreign direct product rule, “one of the key areas” still “unaddressed” by the agency’s regulations and guidance, said Kim Strosnider, a trade lawyer with Covington. She said Commerce’s compliance expectations for the FDP rule are rising despite due diligence challenges faced by industry, pointing to the agency’s record $300 million penalty against Seagate Technology in April (see 2305080029 and 2304190071).
China’s recent restrictions on Micron products are having broader than expected consequences for U.S. exporters, a trade industry conference heard last week, and may portend how future Chinese retaliatory actions will affect U.S. companies.
Ajay Kuntamukkala, partner at Hogan Lovells, has been named office managing partner in the firm's Washington, D.C., office, effective July 1, the firm announced. Succeeding Michele Farquhar in D.C., Kuntamukkala currently sits as a co-leader of the International Trade & Investment practice. His practice centers on "economic sanctions, export controls, and compliance with government licenses and authorizations," among other things, the firm said.
Sen. Marco Rubio, R-Fla., speaking at an American Compass event this week on Capitol Hill, said he's worried that the pervasiveness of U.S. sanctions could move Brazil, Argentina, Saudi Arabia, India and others away from using the dollar. "And I've been a supporter of sanctions," he said. "But at some point, you sanction enough people, and you create this entire marketplace that's sanctioned," and that creates an incentive to try to find a way around the sanctions by buying goods in China's yuan.
The Biden administration should better use sanctions to convince the Mexican government to take stronger actions against drug cartels, Republicans on the Senate Foreign Relations Committee wrote in a June 21 letter to the Treasury and State departments. The lawmakers, led by Sen. Jim Risch of Idaho, the committee’s top Republican, said Mexico has turned a “blind eye” toward its cartels, and the Biden administration should sanction state and local Mexican officials “who directly support or enable" them.
A bipartisan bill introduced in the Senate this week could allow the U.S. to better target sanctions evasion by rewarding information leading to the arrest or conviction of evaders. The Sanctions Evasion Whistleblower Rewards Act, introduced in part by Sen. Jim Risch of Idaho, the top Republican on the Senate Foreign Relations Committee, would expand the State Department’s Rewards for Justice program to offer rewards for “information about the identity or location of individuals and entities that defy sanctions imposed” by the U.S. or the U.N., the lawmakers said.
House Select Committee on China Chair Mike Gallagher, R-Wis., is asking the Commerce Department for export licensing information involving Chinese companies with ties to Beijing’s expanding “signals intelligence” presence in Cuba. In a June 20 letter to Commerce and the Office of the Director of National Intelligence, Gallagher said China’s reported effort to expand its military and spy facilities in Cuba (see 2306130062) is likely being “aided” by Chinese telecommunications companies, including those that have violated U.S. export controls to acquire American intellectual property.
Canada this week announced a new set of sanctions against Iran, designating seven Iranian judges for their role in “gross and systematic human rights violations.” Canada said the judges are “notorious” for issuing death sentences and prison terms following sham trials based on evidence “gathered under torture.” The designations help align Canada’s Iran sanctions regime with those administered by the U.S., the EU and the U.K., the country said.
The U.K.'s Office of Financial Sanctions Implementation on June 20 amended its general license covering humanitarian assistance in Ukraine. OFSI updated the definition of "non-government controlled Ukrainian territory" to include the oblasts of Kherson and Zaporizhzhia. The agency also added nine entities to its "Designated Financial Institution" list: Bank St Petersburg PJSC, Bank Uralsib PJSC, MTS Bank PJSC, Bank Zenit PJSC, Bank DOM.RF, Rosbank PJSC, Tinkoff Bank, Russian Regional Development Bank and PJSC JSCB Metallinvestbank.
The Commerce Department’s International Trade Administration is accepting applications for an upcoming trade mission aimed at introducing U.S. exporters to East Asia's information and communication technology security and critical infrastructure protection markets. The Sept. 18-26 mission to Taiwan, South Korea and Japan will look to help exporters find “business partners and export their products and services to the region,” ITA said. Participants must certify that their products comply with U.S. export controls. The application deadline is June 23, with those received after that date “considered only if space and scheduling constraints permit.”